Pete Domenici

Mr. DOMENICI

Mr. DOMENICI. I understand. The only thing I am concerned about, if you are going an hour equally divided--3:15 is the vote; isn't it?

Mr. DOMENICI. Mr. President, before Senator Gramm leaves the floor, I thank him for this aspect of the bill that helps every senior in New Mexico and across this Nation, 1.6 million, who have HMO Choice Plus. In this bill, we have provided new reimbursement, increased reimbursement to those areas of the United States that were not getting enough money to stay in business. Can the Senator comment on whether he thinks that is good policy based upon choice and other things?

Mr. DOMENICI. Reserving the right to object, might I ask a question? Mr. WYDEN addressed the Chair.

Mr. DOMENICI. Mr. President, this bill, H. R. 2614 contains three important titles: A Medicare and health package to improve the infrastructure of our health care delivery system; a tax relief package and the small business bill. The tax package is $295 billion over ten years. It includes: $35 billion in small business tax relief; $88 billion in health and long term care tax relief; $46 billion in Pension and IRA tax relief; $7 billion in school construction tax provisions and $25 billion in Community Revitalization provisions. The package also includes a repeal of the telephone tax which will save consumers $55 billion over ten years. I am very pleased that this bill includes an IRA Pension Security package. At a time of unprecedented prosperity, it is a startling to realize that most Americans have only saved about 40 percent of what they will need for retirement. Another frightening fact: Americans, in the aggregate, borrow more than they save. The pathetic truth about our tax code: Our federal income tax code is down right hostile to savings and investment. Therapeutically, the bill before us today is a step toward eliminating some of that hostility. Fact: The baby boom generation is aging. Americans are living longer, and yet, there has been no growth in pension coverage for the past 2 decades. Half of the American work force today--70 million Americans--do not have a 401 (k) or any kind of pension plan. The problem is much worse for people who are small business persons. Only 19 percent of small businesses with 25 or fewer employees have any kind of pension. To address this dire situation Chairman Roth and the joint leadership have developed a package of IRA and pension simplification provisions that are excellent tax and pension policy. The bill includes $46 billion in tax benefits for IRAs to make more people eligible and so that they can save more in their IRAs. The bill increases the IRA contribution limit from $2,000 to $5,000. Contribution levels were set 20 years ago and they need to be updated. This bill will increase the current law IRA contribution limitations to $5,000 over three years in $1,000 increments; Increases the income limits for contributions to Roth IRAs for joint filers to twice the limit for single filers. It increases the income limits for those eligible to make a rollover from a traditional IRA to a Roth IRA to $200,000. This bill strengthens our pension system. And its expands opportunities for Americans to get pension coverage especially women. As we know, women live longer than men but only 32 percent of women have pensions as compared to 55 percent of men. This bill includes pension catch-up provisions for workers over the age of 50. This is accomplished through an accelerated contribution mechanism. Older workers, especially women who return to the work force would have the opportunity to build up their retirement nest egg more quickly. Under this bill women who have left the work force, perhaps to be stay at home mothers, and then reenter the workforce later in life, can increase their pension contributions to make up for the time when they were not in the workforce. This legislation modernizes our pension laws to meet the work patterns of today's more mobile workers. Defined contribution plan are made portable so workers can move their retirement nest egg from one type of pension plan to another as they move from job to job. This bill allows workers to become vested in their pension plans more quickly. The vesting period is the amount of time a worker must stay at a job in order to take his employee and employer contributions with him when he changes jobs. Instead of the current law vesting period of 5 years, this bill would shorten the period to 3 years. This means that if a worker changes jobs after three years he can take his entire pension benefit contributions with him and roll it into the pension plan at his new job. Small business tax relief is also provided in this bill and it is coupled with an increase in the minimum wage. This package is similar to an amendment I offered to the bankruptcy bill last year. It is a sound and balanced package. Nationwide, 1.6 million workers are paid the minimum wage. In my own state of New Mexico, roughly 5 percent of all workers (or 40,000 citizens) are paid at or below the minimum wage. I think we should give these workers a raise. However, it is important that we do so in a way that generates the least amount of hardship on small business. That is why I'm pleased that this bill will increase the minimum wage by $1.00 per hour over the next two years, bringing it to $6.15 by 2002 and includes a package of small business tax cuts that will help small businesses create more and better paying jobs. I would submit that a key reason for modestly raising the minimum wage is to ensure the continued success of the historic welfare reform legislation passed by Congress in 1996. I would note that nationally since the March of 1994 record high welfare caseload of almost 5.1 million families the 1996 welfare reform legislation has reduced the number of families receiving assistance by 48 percent to about 2.7 million. However, as we ask more and more people to get off welfare rolls and onto employment rolls, we must have a minimum wage that reflects the reality of the marketplace. My point is simple, if these individuals are to continue as productive members of the workforce, we must ensure the minimum wage at least keeps pace with inflation. For instance, in the New Mexico the average hourly earnings of an individual working in retail has increased by one penny over the past year. I would also like to take a minute and briefly discuss the impact of a minimum wage increase on New Mexico. From 1990 to 1996 the median household income actually fell almost $5,000 to about $25,000. Let me repeat that, the median household income in New Mexico has actually fallen and not surprisingly the percentage of New Mexican's living below the poverty level has increased fro 20.9 percent to 25.5 percent. Sadly, New Mexico ranks near bottom nationally in terms of personal income per capita and median household income and conversely near the top in terms of people living below the poverty level. I do not believe for one minute the minimum wage increase will solve all the ills facing New Mexico, but I do believe it is a good first start. Let me briefly describe the small business provisions included in the bill. Above the line deduction for health insurance expenses for families without employer-provided coverage: Under current law corporations are allowed to write off 100 percent of their health insurance costs, but workers without an employer-subsidized plan get no deduction unless they itemize and have total medical costs exceeding 7.5 percent of their adjusted gross income. Most middle class American's don't itemize, and of those who do, few can meet the 7.5 percent AGI test to get any tax relief for health insurance costs. This bill provides an above-the-line deduction (available whether you itemized or not) for health insurance costs for individuals whose employers do not pay for more than 50 percent of the costs of coverage. Under the bill, workers may deduct 25 percent of costs in 2001-2003; 35 percent in 2004 ; 65 percent in 2005 and 100 percent thereafter. One hundred percent Self-Employed Health Insurance Deduction will help 11 million people who are self employed. If a person is doing business as a corporation, health insurance is 100 percent deductible. This means that the corporation can provide health care insurance with pre-tax dollars and that makes it much less expensive to provide benefit to employees. This is the way it has been for a long, long time. However, in 1995, if someone were self-employed he or she would not be allowed to deduct health insurance costs because the law lapsed. For several years now, Congress has been trying to increase the deduction for the self employed. Under the tax law currently in effect 60 percent of their health insurance costs is deductible for the self-employed. There is no tax policy justification for treating corporations one way and the self- employed another. The majority of all businesses in this country are self-employed. These are often firms with very little cash, a good idea and talent struggling to make a success. Once they do succeed, they are the ones that create nearly two out of every three net new jobs. These small firms have sustained this job creating record for more than twenty years. Clearly, the tax code should not treat them so shabbily. The need for the deduction is indisputable. Unincorporated business owners experience the worst of all possible worlds in the health insurance marketplace. Usually they can only buy an insufficient health insurance policy for a very high price and they are denied the same incentives and tax treatment enjoyed by incorporated, bigger businesses. If this legislation becomes law, the self-employed will be able to take 100 percent deduction for their health insurance costs on their 2001 taxes. I am pleased that Congress is taking this step to address the health insurance deductibility gap and to make it permanent. Total deductibility has been a top priority of the various state small business throughout the country. In addition to tax policy fairness and job creation, restoring the deduction for the self- employed is important because the self-employed are one of the largest groups of uninsured citizens in America. In New Mexico, there are 75,000 self-employed individuals about one- third of them take advantage of the deduction. This number does not include farmers and ranchers who are an other group that will benefit from the tax law change we are making today. The self-employed do not have high level incomes. Over 75 percent of the self-employed have incomes of less than $25,000 and an additional 13 percent have incomes between $25,000 and $50,000. Twenty-three percent of self-employed do not have health insurance. We have as good an economy as we're ever going to have . . . but the number of uninsured has increased,'' said Chip Kahn, president of the Health Insurance Association of America. ``The problem has gotten worse in good times, which means people are very nervous about what would happen in an economic downturn.'' This conference report increases the amount that can be expensed from $20,000 to $35,000. Under currrent law, the amount that may be deducted is $20,000 to 2000; $24,000 in 2001 and 2002; and $25,000 in 2003 and thereafter. This change means an additional $15,000 tax savings for small businesses investing in new equipment next year. Small business people will be able create more jobs because they will be able to expense up to $35,000 of investment in any one year. This will lower the cost of capital, and help with cash flow. I expect that the most likely expenditure to be expensed is computer systems. Computers are contributing significantly to the productivity of the American work force. The work opportunity credit, WOTC, provides a tax credit for wages paid to employees hired from one or more of eight targeted groups, i.e. individuals receiving federal assistance. The credit is designed to encourage the hiring of hard-to-place workers. The work opportunity tax credit replaced the targeted jobs tax credit which I helped author in the 1970's. The bill extends the WOTC through June 30, 2004. The bill also includes a provision that allows banks to pay interest on business checking accounts. It's about time. Business meals are one of the few ordinary and necessary business expenses that are not 100 percent deductible. In 1993, the Democrats lowered the business and meal deduction from 80 percent deductible to 50 percent deductible. This bill would reverse that trend. Restoring the deduction to 70 percent will help waiters, waitresses, busboys, bartenders, bell hops, reservation clerks. When the Democrats went after the deduction they said they were targeting the three-martini lunch. But experience has shown us that there have been many unintended consequences--consequences that we predicted. They meant to stop the three martini lunch, but it was the business traveler who eats his own meals, whether eaten in a hotel, coffee shop, or restaurant, or grabbed from a food cart that got the ax. Most of the people purchasing business meals are self-employed and in total, 70 percent of those who purchase business meals have incomes below $50,000 and 39 percent had incomes below $35,000. The last major section of this tax package that I would like to talk about is the community renewal provisions. The bill would designate 40 renewal communities, 12 of which are in rural areas. They would receive the a 15 percent wage credit on the first $10,000 of wages paid per worker, an additional $35,000 of expensing; deduction for revitalization expenditures capped at $12 million per community and a zero percent capital gains rate on qualifying assets held for more than five years. The bill increases the low income housing tax credit and increases the volume cap for private activity bonds that are very useful in attracting business. Mr. President, I am extremely pleased this package also contains a helping hand for our seniors. Today we are providing renewed assurances to our seniors that Congress is committed to not only the continued health of the Medicare program but, to improving the program. The ``Medicare, Medicaid and SCHIP Benefits Improvements and Protection Act of 2000'' is a victory for our seniors and I commend my colleagues and especially Leader Lott and Chairman Roth for all of their work on this measure. The package before us addresses the critical needs of the Medicare+Choice program, skilled nursing facilities, home health care, hospitals, rural health care providers, and the Medicaid program. I am especially pleased the package contains the ``Medicare Geographic Fair Payment Act of 2000'' that will create a far more equitable reimbursement system for the Medicare+Choice program. The provision will place states on more equal footing and begin to end the blatant discrimination against states, like New Mexico that deliver health care in an efficient manner. It means New Mexico seniors will continue to have the option of sticking with their Medicare-HMO plans that often offer more options, like prescription drugs, than the basic Medicare program. Specifically, the package will increase the Medicare+Choice minimum payment floor to $525 a month per beneficiary in 2001 for all Metropolitan Statistical Areas, MSA's, with populations exceeding 250,000. In New Mexico, the stakes are particularly high because without this provision 15,000 seniors will lose their Medicare+Choice coverage on January 1, 2001. Under the provision health care providers in the Albuquerque MSA are currently reimbursed at $430 per beneficiary and they will now see an increase of $95 to create partial equity with other areas of the country. The result will be at least an additional $34 million for New Mexico in FY2001, and at least $170 million over the next five years. Also, the package will increase the payment floor for Rural Areas from the current $415 to $475 in 2001. However, the victory for seniors in New Mexico and across the country may be very short lived because the President believes the legislation spends too much money on the Medicare+Choice program. I am utterly shocked and dismayed over the President's threat to veto this package. I would simply ask the President not to treat this hard-won compromise agreement as a political football. Too many lives will be affected on whether this increased funding is made available to ensure continued access to Medicare-HMO benefits, nursing home care or health insurance for children. The Clinton-Gore Administration is actually threatening to veto a bill that would increase spending on Medicare and help millions of seniors across this country. I find it very hard to believe that the President would want to veto a bill which: increases payment for hospitals, including teaching hospitals and rural hospitals; increases payments for home health agencies; and increases payments for hospices and other health care providers. I would submit that spending money to end discriminatory practices should never result in veto threats. There is simply no rationale for a discrepancy of an $814 reimbursement for Staten Island and $430 for Albuquerque. It is especially unfair given the fact that seniors pay the same Medicare premium no matter where they live. I am also sure Benny Maestas of Santa Fe would disagree with the President's belief the package spends too much on the Medicare+Choice package. I say this because the Santa Fe New Mexican newspaper ran a story about one of these seniors--Benny Maestas. Unfortunately, Benny will lose his prescription drug coverage next year and be forced to pay several hundred dollars a month for his medications, instead of the $50 per month he currently pays for his prescription coverage through Medicare+Choice. And it is not only seniors in New Mexico that will benefit, but seniors from all over the country. Let me name just a few of the places that will get sizeable increases in their payment rates: Portland, Oregon; Seattle, Washington; Fresno, California; Albany, New York; York, Pennsylvania; Grand Rapids, Michigan; Fayetteville, Arkansas; Buffalo, New York, and many more. I would simply ask the Clinton-Gore Administration, which of these cities do they not want to help? I also want to state how pleased I am that we are once again addressing the need of Skilled Nursing Facilities, SNFs. Our action today will assure our senior citizens maintain continued access to quality nursing home care through the Medicare program. I believe the provisions supporting SNFs are particularly important because nationally, almost eleven percent of nursing facilities in the United States are in bankruptcy and in New Mexico the number is nothing short of alarming, nearly fifty percent of the nursing facilities are in bankruptcy. I believe these provisions are especially important for rural states like New Mexico, because many of our communities are served by a single facility that is the only provider for many miles. If such a facility were to close, patients in that home would be forced to move to facilities much farther away from their families. Moreover, nursing homes in smaller, rural communities often operate on a razor thin bottom line and for them, the reductions in Medicare reimbursements have been especially devastating. Additionally, not only does the package stabilize the Medicare program but, our seniors will be provided with new and improved benefits. In addition to lowering out-of-pocket outpatient hospital costs, the plan also offers new coverage for biannual pap smear screenings and pelvic exams, medical nutrition therapy for patients with diabetes and renal disease, and screenings for colon cancer and glaucoma. I am also pleased the package addresses a critical funding problem with the State Children's Health Insurance Program, SCHIP, faced by forty states, including New Mexico. The Medicare-Medicaid package will allow New Mexico and other states to retain a majority of their unspent FY 1998 and 1999 SCHIP allotments until 2002 and use a percentage of those funds to continue outreach and enrollment activities. New Mexico's situation arose because the Heath Care Financing Administration strictly implemented the SCHIP program and refused repeated requests by the state to implement additional benefits. As a result, New Mexico has only been able to use about $3 million of its SCHIP allocation. However, the provision in this package will allow the state to keep about 60 percent of the $58 million it stood to lose this year under the SCHIP program. Mr. President, I was here for part of the discussion by the majority leader and minority leader with reference to this bill. I think he made a few allusions to what soon-to-be-President Bush would do. First, I want to say about this tax bill, for those who think we don't know what is in this bill, let me suggest that almost all of it has passed either body, either the Senate or the House--every provision. All of the small business provisions, which are wonderful for many people who work for small businesses, passed the Senate. How do I know that? It was my amendment. It was a minimum wage amendment that had on it all the small business tax measures, one of which is earth-shaking but so simple that I don't know how anybody could be against it. Those who vote against this bill are saying to those people who are employees and do not get their health insurance paid by their employer, if they have the wherewithal to buy their own insurance, they can deduct the cost of that insurance. Now most people listening would say they thought that was the law all along; why would you deny that? Businesses deduct the costs of health insurance, but individuals who buy their own, who are employees and are not covered--which, I believe, is millions of Americans--will begin deducting the cost of their health insurance, just as businesses do, on their own individual returns. Right now, they are precluded, unless they take it as the big deduction, and then 7 percent of the money they earn has to be for health expenses. Let me suggest that the minimum wage is raised in two pieces. It goes up one full dollar. That is what the President wanted. It is in this bill. To suggest that we would vote against this bill because there is an error in the bill regarding the effectiveness of the minimum wage is a phony argument. That will be fixed probably before we leave. That will probably be fixed in one of the appropriations bills. I could go on. Let me ask one question: What does the tax law of this land need more than anything else? It needs provisions that tell Americans: You can save more money for your retirement than you do today. This is probably the most significant package ever passed to enhance the savings of American people because the IRAs go up, and many other things they will be using and are using will be enhanced dramatically. The Democrats were up here arguing about retirement reform, in terms of having the ability to accumulate more savings for retirement time. They talk about it. This bill does it. It does it in a very good way. Frankly, there are some things in this bill I would not favor. It is a very large bill. This Senator remembers when we voted on a tax bill that was brought to the Senate in a big cardboard box. That is not a good way to do it. It happened to be a pretty good bill. But it was brought over here by the Clerk of the House in a big cardboard box; it was so big. It passed the Senate overwhelmingly because pieces and parts of it had passed both Houses and, more or less, everybody knew what was in it and thought it was a good bill. One last observation. For those on the other side who are talking about how late we are, I want to remind those who pay attention to us that in the last 25 years, most of which have been controlled by that side of the aisle, we have completed our appropriations bills on time only three times. That means every single Congress, in 22 out of 25 years, was unable to get its work done by the October 1 deadline. I don't know why. I seek to change that. I seek to make appropriations 2 years and budgets 2 years. That might mean this won't happen in the future. But even that is hard to get passed. So to those who think it is management and it is our Republican leader, let me say I think he has done an outstanding job. There has never been a more political time in the closure of a Congress in my 28 years here. The White House is playing politics to the hilt, the Democrats are playing politics to the hilt, and then they blame Republicans for not getting it done. I believe the agenda to finish is an agenda that the Republican leader has in mind, and if we just get a little cooperation out of the President, we will get our job done. If he sits down there like a dictator instead of understanding that under the Constitution of the United States we have a very powerful right, and that is the purse strings and the bills under the purse strings of America--he comes at the end of the session and he wants all kinds of things, such as a major new immigration law. I might support it, but it obviously needs hearings and it ought to be worked on. Now we are being told if you don't do that, you can't get the appropriations bill to keep the Justice Department open and the FBI salaries. Maybe we ought to test the President on that one. Maybe he ought to be permitted to veto the bill that pays the FBI, and other law enforcement, and the judges because he doesn't get one thing--just one item--on the bill he wants. That item may be one he is looking at out there and saying, let me be political and see if I can help Vice President Gore in his campaign. I want to also suggest that the President of the United States is going to be vetoing this bill when it goes down to him, in spite of the fact that there are some real Medicare changes that help seniors across this land. I believe we have made the case that HMO Plus is a good program in States such as New Mexico, Oregon, Washington, Minnesota, and literally scores of cities across America. Why? Because the senior citizen is getting more than he gets when he goes to the Federal Government for Medicare. In many cases, they are getting prescription drugs, which we are arguing about giving them, too. They already get it under HMOs in some parts of America. I want to talk about New Mexico. New Mexico is one of those States that has been discriminated against in the Medicare+Choice reimbursement. We were receiving such a small amount that the HMOs are saying they cannot exist. And they have already told thousands of senior citizens in New Mexico that by January 1 they cancel out. That is because we have never had an adequate reimbursement. Why? Because when we passed the law, it gave the States essentially what is was costing them. In New Mexico, Minnesota, Oregon, Washington, and scores of other places the cost of health care was very cheap. So they gave us a very low rate of reimbursement while other parts of America got very large ones. To put it into perspective, in New Mexico the HMOs were getting reimbursed at $430 per senior, while in parts of New York they were getting $814. We are asking that this discrimination stop, and the thousands of people in New Mexico who have HMOs that perhaps give them prescription drugs ask that you sign this bill so they can continue to have that kind of care and that kind of protection. If it is vetoed, Mr. President, come January 1, in my State, everyone who is going to be denied their current coverage, which they think is very good coverage, can look to this White House and this President for saying: I will not sign that bill--even though it has many provisions the President likes. But he says the HMOs cost too much. He says the HMOs are big businesses. Let me tell you, in my State, the three that deliver coverage are known as Presbyterian hospitals--two are the St. Joseph's Hospital Plan and the Lovelace Plan. None of them are profit making, as I understand it. Two are charitable, and one is a foundation of sorts. So, Mr. President, veto the bill. Say to the seniors in New Mexico who are currently covered that we don't know what is going to happen to them on January 1. There are many other provisions in this bill, contrary to what the minority leader said, on the Medicaid side that are very good for hospitals and very good for rural hospitals. I am not an expert on it. But this bill provides $31 billion in the first 5 years for Medicare reimbursement adjustments. My friend is sitting here. Is it 31 over 10 or over 5?

Mr. DOMENICI. Reserving the right to object.

Mr. DOMENICI. Will the Senator yield?

Mr. DOMENICI. Would you explain ``after-tax dollars''? Since you are talking about millions of Americans who might buy their own insurance and get nothing today by way of tax relief, how will that work?

Mr. DOMENICI. I have the right to object. There is a unanimous consent request pending.

Mr. DOMENICI. Mr. President, reserving the right to object, I wonder if the manager of the bill, as part of this, would use his efforts with reference to how much time each one gets so that at least those we have agreed to would be able to speak before 3:15. You can do that, I believe.

Mr. DOMENICI. Will the Senator yield for a question?

Mr. DOMENICI

Mr. DOMENICI. Mr. President, do I understand I have a half hour?

Mr. DOMENICI. Thank you, Senator Hollings, for your kind remarks. I don't agree with your theory or your conclusions, but I appreciate working with you over the years. Your dedication to getting the debt under control has not gone unnoticed over the years. We had an unusual recovery with huge amounts of new taxes coming in that neither you or I expected. Society has changed, no doubt about that.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, today I will speak about Vice President Gore's lack of a Social Security policy. I will entitle my premise today ``Odd Gift of Bonds.'' Let me start by saying I found it interesting that just 2 days ago the Treasury Secretary--that is, Secretary Summers--took time out of his busy schedule to speak with reporters and go on the talk show circuit to comment on Governor Bush's Social Security proposal. Some of Secretary Summer's conclusions appeared on the front page of the Washington Post yesterday. The title was ``Cabinet Opens Up On Bush.'' ``Treasury Secretary says Social Security Math Doesn't Add Up.'' I hope when I am finished some people will take a look at the Vice President's so-called Social Security plan, and maybe they will conclude, as I have, that the math does add up, but it doesn't do a thing for Social Security long term. Nothing. Zero. It should be noted, at least while I have been here, that traditionally, Secretaries of the Treasury do not get themselves involved in political campaigns, and for good reason. Indeed, former Secretary Bob Rubin, also an appointee of this administration, stayed out of the campaign in 1996. But apparently Secretary Summers had enough time to give interviews; but he didn't have enough time to offer any real evidence to back up his stated claims. None. No evidence. In fact, I'm quite sure that the Secretary of the Treasury is grading a fictional Bush plan so that he can join with the Vice President and many other Democrats in orchestrating a campaign to scare senior citizens, as they have done regularly in past campaigns. Also, I find it interesting that the Washington Post reporter--whom I know--who wrote this story, didn't come to any Member or anyone who has tried to understand the Gore Social Security plan to ask for some comments about it and whether it does anything at all for Social Security. So today I will take a few minutes to explain the Clinton-Gore Social Security plan, and then the Gore plan, which is slightly different than the Clinton-Gore plan, which is really not a plan at all but an illusion of a plan. It is not a plan. It is an illusion of a plan. President Clinton initially proposed a version of this plan in January of 1999. It was never taken seriously then or now. And for good reason. I can remember it was very difficult to get a Democrat to offer the President's plan, including the so-called Social Security fix in the budget hearings, in the Budget Committee, and surely there were never more than a few Senators whom I believe in clear partisan dedication who supported this odd gift of bonds to the Social Security trust fund. This so-called plan, the one that President Clinton sent us in 1999, is strictly a political exercise intended to create the perception that the President and Vice President have met their commitment to ``save Social Security first,'' as they state it, when, in fact, they have no such plan, and the Social Security long-term problems remain absolutely unresolved. In fact, as Governor Bush has said, for 8 years the Clinton-Gore administration has promised to save Social Security, and yet, under the Clinton-Gore administration, the present value of the Social Security deficits have already increased 60 percent during that 8 years of doing nothing, according to the Social Security actuaries. That's roughly $28,000 per household. That is the amount that it has gone up. Perhaps Secretary Summers, as the managing trustee of Social Security, should be asked why he has allowed that to happen. It has happened because we have not taken steps to reform or fix Social Security. Now I will talk about the $40 trillion IOU plan. What does the Clinton-Gore plan do? Beginning in the year 2011, and continuing through 2050, they transfer IOUs from the general fund of the government to the Social Security trust fund. I will soon introduce a letter from the Congressional Budget Office that says over that period of time from 2011 to 2050 the total accumulated costs of both interest and IOUs--get this--will be $40 trillion. That means for that plan to make sense somehow, some way, some time, during 2011 and 2050, they will have to ask the American people to do one of three things: No. 1, increase taxes by $40 trillion over that period of time. Why? To pay off the IOUs which are soon going to be needed by the Social Security recipients of our country. No. 2, restrain and restrict the programs of our Federal Government over that period of time; that is, discipline our programs so we will save $40 trillion and put it against the IOUs--a mammoth expectation without any probability of occurring. Or we can do some of the two of them. Or we can just say we will do it all by cutting programs of ordinary people that are going on day by day. Nonetheless, these estimates will indicate that we will have to do something in the future to raise large amounts of money that are not currently within the Social Security actuarial expectations from the payroll tax. It will have to come from somewhere. Is that a plan to fix Social Security? I ask anyone if that is a plan? It is not a plan. It won't work. It has been more or less unacceptable to Congress for the 2\1/2\ years that it has been lounging around someplace, for somebody to consider. The estimate I am talking about comes from the Social Security actuaries who estimated the initial amount of general fund transfers to be $9.9 trillion. We then asked the Congressional Budget Office to calculate for us how much additional interest would be paid to the trust fund, based on these transfers. CBO, the Congressional Budget Office, using the actuaries' numbers, estimated that the interest payments would add $30 trillion to the general fund transfers to the trust fund. In total, then, that is $40 trillion in IOUs by 2050. For those who might have a little difficulty with IOUs, let me just say, think of it as a postdated check. The check is there and it is valuable because it has a signature on it: USA. But it is dated 2050. Then when you say: OK, the check is good, pay me--we will, as a nation, have to come up with $40 trillion. When the President initially made this proposal, he--that is President Clinton--he at least proposed one real provision that would have changed Social Security's long-term financing. The President proposed to set up a new Government-run board that would invest up to 15 percent of the Social Security trust fund in the stock market and private bonds. President Bill Clinton recommended that. But it would be run by the Government and the Government would be involved in huge numbers and huge dollar values of the stock of the American stock exchanges and of companies of America. There was a resounding opposition to using a Government board to invest Social Security money in the stock market because it would become political. It would become a board that might not want to invest in this because of public opinion, or that, because the particular corporation causes obesity by selling hamburgers, that is not the right thing so you would not invest in that particular stock. The Federal Reserve Board Chairman said, to that piece of the President's plan: Too much Government involvement in the private economy. So the Vice President has said he does not support that portion of President Clinton's plan. So what he has left is a plan with no investment and $40 trillion will accumulate, by the year 2050, which we will have to pay from somewhere. If you ask, Has he helped anything in his plan? Well, I ask you. He also, I think, makes matters a little worse by proposing two new unfunded benefit expansions that will cost between $100 and $180 billion over 10 years, which just adds to the numbers we have been talking about because we have expanded Social Security without the wherewithal to pay it after 2011. To show you the lack of seriousness of this IOU proposal, the Gore plan does not start transferring funds to Social Security until 2011, well beyond any two terms that he might serve, and five Congresses from now. What he is really saying is he wants the economy of this country to commit $40 trillion in general funds on the promise that we will impose fiscal discipline on 10 future Presidential terms and 20 Congresses. But he will not transfer a penny to Social Security until 2011. Who is going to pay these IOUs off? Our children and our grandchildren. They will be saddled with all the debt and they will be forced to pay these IOUs back--in the form of higher taxes or through the other suggestions that are possibilities that are talked about. In March of 1999, Senator Bob Kerrey said, this plan ``has a great deal of pain in [the] plan--a hidden pain in the form of income tax increases that will be borne by future generations of Americans.'' That is by Bob Kerrey, Democrat from Nebraska. I could not agree more. What is more, the President's own budget for 2000 agreed with Senator Kerrey: These [trust fund] balances . . . are claims on the Treasury that, when redeemed, will have to be financed by raising taxes, through borrowing from the public, or reducing the benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, have any impact on the Government's ability to pay the benefits. An odd gift of bonds--which is the full extent, that I can find, of the plan the Vice President has put forth. I can find very few economists who believe these transfers to Social Security are a good idea and they will fix Social Security. In fact, Ed Gramlich, whom this President recently appointed to the Federal Reserve Board, headed a commission for the President on Social Security. This is what he said: During the deliberations of the 1994-1996 Social Security Advisory Commission, we considered whether general revenues should be used to help shore up the Social Security program. This idea was unanimously rejected for a number of reasons . . . there are serious drawbacks to relaxing Social Security's long-run budget constraint through general revenue transfers. Alan Blinder, Gore's economic adviser, said, in 1999, that the administration should drop the ``gift of bonds.'' It is from his quote that I named this assessment. He said that the administration should drop the ``gift of bonds.'' This is what he said, that is Blinder, at a Ways and Means Committee hearing in 1999. It amounts to a pledge to provide that much more money for Social Security in the future--somehow. But it does not specify the sources. Thus, by itself, it does not fill any of the funding gap. . . . There is a simpler and more intuitively appealing plan which, had the President proposed it, would, I believe, have generated less confusion and raised fewer objections. That would be to dedicate the [Social Security surpluses] over the next 15 years to debt reduction, and therefore to national saving--and to forget about the new gift of bonds and odd scorekeeping rules. Meaning that you have to invent some way to score this in a budget way or to make sense. The Clinton-Gore plan is not really a plan at all. It is a political proposal to confuse the debate and absolve him from the responsibility to offer a real plan to save Social Security. Mr. President, I ask unanimous consent the article by Glenn Kessler regarding the Secretary of Treasury's assessment be printed in the Record.

Mr. DOMENICI. Mr. President, how much time do I have remaining?

Mr. DOMENICI. Mr. President, I will tell the Senate what it says. It is attached to CBO's letter, and it goes 2010, 2015, 2020, right up to 2050, and it has the cumulative IOU transfers that were put in and then the cumulative interest on the transfers. I was shocked--maybe I should not have been; it is almost automatic, it is almost arithmetic--but the total of the cumulative interest on the IOUs and the cumulative transfers amount to $40 trillion by the year 2050. That is the IOU that we give to the American people. They will have to pay it in order to keep Social Security solvent, but nobody is being told that. They are being told we have fixed the plan for x number of years from now.

Mr. DOMENICI. Mr. President, I ask unanimous consent that the attached table be printed in the Record.

Mr. DOMENICI. This is the response to my letter, dated October 18, which has an attachment to it. I will read a paragraph. Although the transfers (and the interest earned on them) would improve the apparent solvency of the trust fund, they would increase the liabilities in the rest of the budget at the same time. That is what I have been saying. As a result, the proposed transfers would have no impact on the Government's net indebtedness, nor would they directly enhance Government's ability to meet promises to future retirees. Indeed, the Government's revenues and expenditures would be the same regardless of whether the transfers were made. I ask unanimous consent that Dan Crippen's letter be printed in the Record.

Mr. DOMENICI. I ask unanimous consent the June 26, 2000, memorandum to Social Security chief actuary Harry C. Ballantyne, on long-range OASDI financial effects of the President's proposal for strengthening Social Security, be printed in the Record.

Mr. DOMENICI. Mr. President, I ask unanimous consent to have printed in the Record a letter which I sent on October 6 to Dan L. Crippen--he is the Congressional Budget Office Director. I asked him the following: I am attaching a June 26, 2000 memorandum from the SSA [the Social Security people] actuaries which gives the exact size of these annual transfers. Their data shows that $9.8 trillion in cumulative annual transfers will have been made by 2050 under the Administration's proposal. I would like CBO to estimate what the cumulative interest on these transfers would be in the years specified in the attached table. Secondly, could you tell me the total amount of IOUs that will be deposited into the [Social Security] trust fund as a result of the cumulative transfers plus the cumulative interest on these transfers in each of the specified years. I ask unanimous consent that letter be printed in the Record.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, I yield the floor and suggest the absence of a quorum.

Mr. DOMENICI. Mr. President, with reference to how many civilian full-time equivalent employees have been reduced during the 8 years showing that 96 percent of it is military and 4 percent civilian comes from OMB, I ask unanimous consent that chart be printed in the Record.

Mr. DOMENICI. Mr. President, I want to take a few moments on two other subjects. First, the Vice President of the United States continues to tell the American people that he has been a master at reorganizing our Government and making it efficient, and that a very large number of employees have been cut from the payroll of the U.S. Government due to this effort. I want to print in the Record a chart from the Office of Management and Budget--their own--the total executive branch civilian full-time equivalent employees during this period of time that they claim they reduced the workforce. All I want to say is one thing: It did not take much to do this because 96 percent, a larger number than I thought, 96 percent of the employee reduction--that is the civilian full-time equivalent reduction--are military civilians who were taken off the payroll as we reduced the Defense Department of the United States; 96 percent. Four percent is the reduction in the nonmilitary civilian payroll of the United States. Let's get it right, Mr. Vice President. Let's tell it right. There were no real reductions other than civilians who were laid off because we reduced the Defense Department. I want to be correct. I said there were none; 4 percent of reductions were from the rest of the civilian Government of the United States. On the last item, let's get this one right. Mr. Vice President, you referred twice in debates to a program to give health insurance to kids. There is a program called CHIP which the U.S. Government gave money to each State so they could try to insure or bring into Medicaid or at least in some way cover more children. The Vice President said to the Republican nominee: Texas has not done very well with that. Your program for covering children obviously indicates--I am paraphrasing--that you did not care about children's health. What should have been said is that 40 States of the Union were unable to use their CHIP money. Would that not have been a fairer thing to say rather than say Texas? The State that has the largest amount of money under that program for children's health and cannot spend it, has not spent it to this date is the State of California. As a matter of fact, they had $591 million that they could not spend on children's health coverage because the program will not work. You cannot fit it into States. You cannot get it approved by the legislature. You cannot find the match, or whatever the reason. Those 40 States, in addition to Texas, are California, Georgia, Washington, Minnesota--Minnesota had the highest percentage of that money left over because they could not spend it, 99 percent. New Mexico, my State, had 92. Arizona had 67 percent of their money. Let's be fair. When you talk about children's health coverage and this Federal program, do not say Texas was unable to spend theirs. Let's say 40 States have been unable, so there must be some deficiency in the program, not in the States. All of those States are led in dollar numbers by the State of California which could not spend $591 million because the program is difficult to do and very difficult to effectuate the coverage of children. It is widely recognized that this S-CHIP program began slowly because State legislatures and HCFA had to approve plans. Right now, we are busy trying to extend the plan for 2 more years for all States. That is because 40 of them have been unable to spend all of the money available. I ask the Vice President: In all those States, including California because they have this huge balance they could not use, is the Governor there adverse to covering children and having more children involved in something like children's insurance or Medicaid or the like? I do not think so, nor do I think the Governor of Texas is because I believe when 40 States cannot do it, we ought to tell it like it is. The next time you are talking about this, Mr. Vice President, you ought to say not Texas alone but California and 39 other States have been unable to use this CHIP money, this children's insurance money, for one reason or another. Texas is among the 40. They do not stand alone. I ask unanimous consent that information that summarizes what I have said be printed in the Record.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, section 314 of the Congressional Budget Act, as amended, requires the Chairman of the Senate Budget Committee to adjust the appropriate budgetary aggregates and the allocation for the Appropriations Committee to reflect amounts provided for emergency requirements. I hereby submit revisions to the 2001 Senate Appropriations Committee allocations, pursuant to section 302 of the Congressional Budget Act, in the following amounts: [Dollars in millions] ------------------------------------------------------------------------ Budget authority Outlays ------------------------------------------------------------------------ Current Allocation: General purpose discretionary............... $607,973 $597,098 Highways.................................... ........... 26,920 Mass transit................................ ........... 4,639 Mandatory................................... 327,787 310,215

Mr. DOMENICI

Mr. DOMENICI. First, I say to the distinguished Senator from Nebraska, I don't know if I will have an opportunity again to be on the floor when the Senator makes a speech on the Senate floor because I don't know where the next 5 or 6 or 8 days will bring us. But I want to tell the Senator thanks for all he has done while he has been here. You have been, as you were in the military, a hero; you have taken some tough stands. While not a budgeteer, as I am, you have chosen to express yourself many times in terms of the great concern you have for the outyear, the long-term effect of some of our entitlement programs, and actually you have expressed yourself that maybe appropriations are not getting enough money. That is perception, with reference to the Federal Government, of a very, very right kind.

Mr. DOMENICI. He had 5 minutes.